How much does it actually cost to buy a rental property?

[Rudy Cecere]

Hello, I am a 20 year old that is planning on acquiring my first rental property sometime this year.  At first I thought that saving up $5,000 would suffice, but after working at a real estate development company this summer as an intern I am worried that my target is too low.  

To back up a step, my goal is to buy a one family home at around $50,000 that is close to move in ready that would generate a couple hundred dollars of cash flow a month.  I thought that a 10% down payment would be enough, so I set my savings target at $5,000.  

Now I am thinking that I should save up extra money for closing costs such as inspection, lawyer fees, and a title search.  Also, minor renovations, possible vacancies, etc.

How many of these fees do I actually need to worry about and what are your recommendations for a good amount of money to save before I invest?

Thank you for your replies in advance! 

[Jedd Braunwarth]

Rudy Cecere you still may need more than $5k but another option could be an owner occupied multi-family property. In some cases you can put down as little as 5% plus closing costs, etc. I'd say $10k total may get this done and leave a little left. Then you have a place to live with someone else paying your mortgage. You will be able to safe up for the next one much faster now.

Talk to some local lenders and go in prepared with some current multi family properties for sale to reference.